What Happened?
A number of stocks fell in the afternoon session after markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Home Builders company D.R. Horton (NYSE:DHI) fell 3%. Is now the time to buy D.R. Horton? Access our full analysis report here, it’s free.
- Memory Semiconductors company Seagate Technology (NASDAQ:STX) fell 3.1%. Is now the time to buy Seagate Technology? Access our full analysis report here, it’s free.
- Real Estate Services company RE/MAX (NYSE:RMAX) fell 3%. Is now the time to buy RE/MAX? Access our full analysis report here, it’s free.
- Inspection Instruments company Badger Meter (NYSE:BMI) fell 3.1%. Is now the time to buy Badger Meter? Access our full analysis report here, it’s free.
- General Industrial Machinery company Icahn Enterprises (NASDAQ:IEP) fell 3.1%. Is now the time to buy Icahn Enterprises? Access our full analysis report here, it’s free.
Zooming In On Icahn Enterprises (IEP)
Icahn Enterprises’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock gained 4.5% on the news that a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
Icahn Enterprises is down 7.5% since the beginning of the year, and at $8.31 per share, it is trading 47.7% below its 52-week high of $15.89 from August 2024. Investors who bought $1,000 worth of Icahn Enterprises’s shares 5 years ago would now be looking at an investment worth $158.99.
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